THE KINGS OF MADISON AVENUE: Roger Haupt - Stefano Hatfield talks to the Essex boy who stunned adland by creating holding company BDM

Roger Haupt laughs nervously and implores ’please, if I ask you for

anything out of this, I am just this guy from the Midwest and I don’t

want to be seen as a Big Swinging Dick. That’s not me. That’s just not

me.’

Perhaps, but as Haupt is learning fast, there is little chance of a

quiet life for the man behind BDM, the latest advertising superpower;

the man who made the three-way Leo Burnett/Dentsu/MacManus deal happen;

the man who, in January, will become president and chief executive

officer of the Leo Group. Who is this self-deprecating new advertising

mogul, and how did he pull off a deal that took the advertising world

almost entirely by surprise?

To have any chance of understanding Roger Haupt, you have to understand

Leo Burnett. And there is little chance of doing that from London where

the local agency has slipped quietly down to 19th place in the

rankings.

Instead, you have to go to Chicago, where the landmark Leo Burnett

building occupies an imposing position on the south bank of the Chicago

River.

There, the 64-year-old, dollars 2.7 billion agency employs some 2,400

staff and has twice been voted one of America’s 100 best companies to

work for.

On the 22nd floor of this monument to American capitalism, you find

Haupt’s characteristically modest office. Functional and blandly

tasteful, there are just a few Japanese prints and the obligatory family

photographs for light relief. It’s a far cry from the corner suite

statements of so many of his new CEO peers.

Sitting comfortably, wearing an open-necked shirt, Haupt is flanked by

two of the Burnett organisation’s 25 public relations security

guards.

But you have the impression that they are there because they’d quite

like to hear what he has to say to Campaign, rather than being terrified

he’ll ’mis-speak’.

On a glorious late autumn day, the view north across the river is

inspiring.

There’s the Wrigley building, there’s the Sears Tower, to the right are

the Chicago Tribune offices. The city’s world-renowned architecture

gleams in the freakish sunshine and all seems well in the capital of

middle America. That’s the problem - it always does.

Chicago is more foreign to New York City than London. Chicagoans ham up

the differences, but they are real. For too long Leo Burnett, like its

giant Chicagoan counterpart, FCB, was content with its extraordinary

domestic success and could afford to pay less attention to the rest of

the world than its New York rivals.

And why not? Built on the business of Midwest giants such as Kellogg,

Oldsmobile, Maytag, Keebler, Kraft, McDonald’s, Hallmark, Pillsbury and

Procter & Gamble, the foundations of the business are rock solid.

Clients from beyond the Midwest, such as Coca-Cola, Philip Morris and

Disney, are not to be sniffed at. Ten of the agency’s clients have been

with it at least 25 years, and another eight for 35. Who needed the

outside world?

Chicago has had something of a rude awakening. The convergence of global

business and the internationalisation of competition has caught some of

the Midwest corporations looking sluggish. As companies such as Kellogg

struggle to make sense of the new world order, the concurrent global ad

agency group shakedown has begun, belatedly, to shake up Chicago.

And Leo Burnett caught a cold in the mid-90s. It was - again - not that

it was doing anything particularly wrong, more that it had begun to

appear off the pace in relation to its rivals. After five decades of

continual growth, suddenly clients were leaving and growth was stagnant

between 1995 and 1998.

Something had to be done, but Burnett’s options were limited. As a

private company, it could not afford to make the necessary investments

in new technology-related services. It also lagged behind several of its

key rivals in terms of both strength of international network and its

capabilities in diversified agency services (below-the-line).

Global account consolidations of the kind that transform agencies are

few and far between. There is little hope of funding major acquisitions

organically. As is the case with several of its Madison Avenue

counterparts, in the new dotcom era some of the very attributes that

stood Burnett in good stead could now very easily make it appear a

dinosaur.

Into this cheery picture (and remember, many agencies would have killed

to have Leo Burnett’s problems, given its client list) entered the

relatively unknown name of Haupt, when he was announced as Rick

Fizdale’s successor this autumn.

Haupt was actually born in Hornchurch, Essex, and had no intention of

being an adman. A flying buff, he joined the Fleet Air Arm until a car

accident left him with a fractured skull. A friend suggested accountancy

and he joined Unilever, soon finding himself in West Africa.

He moved across to marketing and, almost inevitably, ended up at Lever

International Advertising Services (Lintas) as a brand manager on Omo in

Brazil, not long before the Interpublic Group bought Lintas.

At this point in the story Haupt allows himself one of many bursts of

laughter. The irony of being snapped up by Phil Geier is not lost on the

man who has just stolen the MacManus Group from under the nose of the

venerable and formidable IPG chief.

But was the formation of BDM really just a piece of opportunism - as has

been suggested? And is it a neat solution to an increasingly pressing

problem, or was it just a comforting huddling together of two desperate

dinosaurs?

’We had to really look long and hard at ourselves and ask how do we stop

ourselves from being marginalised,’ Haupt begins cautiously in an accent

that is from everywhere and nowhere. He somehow sounds more Australian

than anything else, with the occasional lapse into folksy Illinois

patois rather than an Essex twang.

’This industry is one in which people talk to each other all the time.

We wanted to remain an effective global player and do so through having

a leadership role, not as a follower.’

When I then ask whether the alternative of being part of - say - IPG was

just a horrifying prospect, Haupt switches to statesman, deflecting the

innuendo, by referring to how Burnett had woken up and was beginning to

spread its own wings.’

Blarney aside, did Burnett have any choice? ’I am a realist,’ Haupt

says.

In my view it was only a matter of time before we would have signed

another deal.’ And did MacManus have even less choice? ’I can’t speak

for Roy (Bostock, MacManus group chief executive) but I believe he would

answer you as cordially as I did. I can assure you he had other

options,’ Haupt replies with a grin.

As interesting as the creation of BDM itself is the decision to go

public, one which had appeared to go against the original spirit of Mr

Burnett himself. But, as the chief security guard points out benignly,

contrary to folklore, there was no Leo edict that the company must never

go public.

So, what was more significant, going public or the formation of the new

holding company? Why not launch an IPO (Initial Public Offering) like

Young & Rubicam?

’Going public of itself is more of a financing mechanism, it’s not a

strategy,’ Haupt insists. ’There’s got to be more to it than that.

Burnett floating could have funded some acquisitions and kept senior

talent happy, but it’s not the paradigm shift we needed.’

It is the involvement of the Japanese giant, Dentsu, that makes this

deal so pregnant with possibilities, but just how meaningful is Dentsu’s

involvement beyond the fact of its investment?

Haupt enthuses over the Dentsu connection, insisting he went to Dentsu

first with the idea. He relishes the ’unrealised potential’ of the

world’s least understood agency and claims he would not have done the

deal without them - but then, he may not have been able to afford to do

so.

There are some nagging doubts, however. Firstly there has been the

inordinate length of time it has taken to confirm Dentsu’s earlier

announcement of a 20 per cent stake in Burnett. There is Dentsu’s

continuing separate arrangement with Young & Rubicam in Asia, and, not

least, the small matter of no cross-holdings. If it really is a

meaningful partnership why does Burnett not have a stake in Dentsu

too?

In his meandering answer to this question, Haupt seems to be the least

convincing of all our time together.

’There’s an awful lot to do,’ he says, a tad lamely. ’I think right now

the differences between Japanese financial markets and here is night and

day. Dentsu is on a course it mapped out two years ago. It is clear

about staying on that course.’

Leaving aside the observation that WPP and Asatsu mapped out its share

deal in the same night and day financial context, why should this foray

beyond Japan be any more successful than previous attempts via HDM and

Y&R?

’Dentsu recognises that the old ways - building yourself, and multiple

partnerships - are not going to work for them today. They also recognise

the threat to their own business from outside, and the need to make a

bold statement. And, by the way, they bucked conventional wisdom by the

speed with which they moved.’

Haupt is rather more convincing when insisting that the deal is not

about what he calls ’bragging rights’. It’s just as well, because even

the combined BDM is nowhere near as large as the Omnicom, IPG and WPP

big three. However, he does concede that where it makes sense the group

will centralise some resources.

Obviously, one of the key areas where it does make sense is media buying

- hence last week’s news of a merger between Motive and Starcom in

London.

So why is there no definitive plan to merge Starcom and

Televest/MediaVest, especially as last year there was an abortive plan

to do just such a thing in isolation of the agencies?

’I really believe we have two very strong brands. This happened really

fast. I have to sit down with Jack (Klues, CEO of Starcom) and assess

what we know, what the conflicts are. This is becoming a market where

quality, planning and research are starting to play a much greater role.

This industry just shoves things all together too often.’

Having said that it is vital to go to Chicago to understand just how

Burnett ticks; it is also true that we tend to judge agencies (rightly)

by their local offices. Can the lowly position in London really be

satisfactory, especially when a competitor like Y&R found a higher

ranking unacceptable?

Haupt insists it is not unacceptable. He enthuses about Nick Brien’s

’innovating’ management of the agency, before admitting that he would

not rule out acquisition. ’I don’t think being big has ever been what

Leo Burnett is about,’ he states, before catching my eye and laughing at

how daft that sounds here on the 22nd floor with its view.

Haupt is clearly a fan of Bartle Bogle Hegarty, as befits the executive

charged with maintaining the relationship with the agency in which

Burnett has a 49 per cent stake. When I say I never really understood

what was in the deal for Burnett, he is certain.

’Put money aside. It’s the partnering of some very smart people who have

some very different views on how to build networks and a business. They

are very strong in planning and creative and there are certain

businesses we couldn’t handle that they could. What global agency would

not have liked to rewrite the rule book in hindsight and ask, why do we

have to have 100-plus offices?’

His answer to the question of whether the BBH stake makes life difficult

for Leo Burnett in London is a blunt one. ’Internal competition is

healthy. Having someone with BBH’s standards about the place is no bad

thing. It doesn’t have a black sheep symbol for nothing.’

Like so many other Burnetters, Haupt has been with the agency a long

time (15 years), and is steeped in its culture and heritage. The answers

to many of my questions about scale, ambition, becoming more New York

focused and being public, refer with pride to the Midwest culture of an

agency he says has been ’good to him’.

’I think what makes Burnett successful is the people. We have a bunch of

caring people here. Genuine caring about the product, the quality of the

service, client success. Star reaching (the Leo Burnett logo) is not

just something you have on a door round here.’

While I grimace, willing the Hornchurch boy to reassert himself, Haupt

concedes, under prompting, that going public will not be easy. ’I don’t

believe a company has to lose its culture and what it stands for when it

goes public, but it’s not easy to marry the rigid financial disciplines

of a public company with the requirements of a service industry.’

Asked what he intends to do with the funding he will have available,

Haupt concedes that the major groups are pursuing roughly the same

strategies.

BDM needs to buy up below-the-line resources in which the group is

relatively backward, and Fizdale is charged with expanding new-media

interests.

On the subject of the impact of new media, Haupt is suddenly less

earnest, the challenge brings him alive. As does the task of translating

agencies’ knowledge of consumer behaviour to the new media - something,

he points out, that management consultancies cannot do.

’We should not be systems integrators and talk about technological

prowess. If everyone’s got data, what’s going to be the difference? It’s

how you mine that data, how you interpret it. To be honest, some

agencies are really struggling with the different business pressures

this brings.’

Haupt acknowledges that Burnett has not bought as aggressively as its

larger rivals, but also insists that the business is not only about

collecting companies and shareholder value. It will be interesting to

see if he can speak with such confidence once BDM has floated.

Nevertheless, his integrity is not at issue. He refers to culture,

integrity and ethics constantly, and has put his career where his mouth

is by staying for so long at a place like Burnett.

’People stay because they can identify with the integrity of the place.

You will say what you have to say, and I understand why there is

cynicism about advertising. But the way we conduct our business is very

important to us. It reflects on the people we attract. I don’t want

people to be cynical about Leo Burnett. I don’t want the company to be

criticised for its integrity.’

Haupt gives the impression of a genuinely interested and caring

employer, steeped in Burnett’s corporate values. It is difficult to

comment on his skills as a network chief; technically he does not even

start the job until next month.

But he displayed flair and daring in creating BDM and putting one over

on his rivals.

Will it be enough to stay out of their clutches? Probably for the

mid-term. But the business is evolving so fast. Haupt is too smart to

state categorically that it will. He has a massive job, with a lot of

practical hard work to get on with - work he clearly relishes, even if

he is not looking forward to spending more time in New York schmoozing

Wall Street.

He appears balanced and realistic about the demands his new life will

make on his life and family. Can he ever escape his job? He claims he

can, because he handles pressure well and can switch off.

’When I can’t, I get in a plane to fly and then self-preservation takes

over,’ Haupt concludes. He is going to need it.

This article was first published on Campaign